Is PF Contribution Compulsory For Contract Worker Whose Salary Is More Than Rs.6,500 - CiteHR
Sumitk.saxena
Service/manager-hr
Mksharma63
Operations, Hr And Marketing
+2 Others

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ours is a manpower outsourcing services company.Could you please clarify and confirm whether PF Contribution is compulsory or Optional for contract worker whose salary is more than Rs.6,500 ?-Thanks
Srinivas
thirdage

Dear sinivas
Greetings for the day,
First of all you should know that EPF accumulation should be deducted on basic salary+da+food conc.(if any), secondly applicability of the act is to all the establishment whose workers strenght is upto 10.Thirdly you should aware of it that deduction of EPF/EPS is compulsory upto the basic of 6500/- exemption is only of those whose basic is above than that last but not least that one a employee become a member of EPF/EPS scheme he can't be discontinued if he remain in service until his basic salary should increase by Rs.6500/- , it only be discontinued by tendering resignation.
thanks & regards,
From,
Sumit Kumar Saxena,
+91-9899669071

Dear Srini, Sumit,

PF is applicable if no. of employees are min 20 and ESI is applicable for min 10 employees.

If anyone's salary has increased above 6500, and if he is already a member of PF, than you cannot stop deducting his PF, you need to continue deducting his PF on basic 6500 (even if his salary+ DA is 10,000).

But in an organisation with more than 20 employees (where PF is deducted for all), if any new employee joins at salary + DA of more than 6500 (for example Rs 8000), than it's sweet wish of that organisation whether they want to deduct PF or not for this employee.

As a manpower outsourcing company, you are liable for deducting and depositing PF and ESI of contract labour. In case of default/ complaint both you and principal employer who has hired labour from you, shall be liable for prosecution and lawful penalty. Therefore in case of outsourced labour/ staff, principal employer should enter into a contract for a value so that contractor should be able to meet his obligation of ESI & PF. The principal employer has every right to demand from contractor to submit the proof of depositing PF and ESI for the actual outsourced staff.

Hi,

PF contribution is perfectly must whether if may be a contractual workmen or permanent workmen till the basic pay (basic + da) is upto Rs.6500/month.

PF Contribution can not be refrain at the whims of the employer as it requires the consent of the employee to and this mutual consent is documented by filling up of form 11 by the concered employee.

Pf contribution and deduction can be refrained for a new joinee in the organization whose basic pay is above Rs.6500/month and the employee consent to refrain from PF by filling the Form 11.

In case exsisting employees,PF deductions and contribution can not be stopped at any stage of employment even if the basic pay crosses Rs.6500/month as effect of appraisal.

But it can be always so done that the employee and employer limits the deduction and contribution till s.6500/ month that amounts to Rs.780.month as Pf deduction and contribution in case the basic pay of an exsisting employee crosses Rs.6500/Pm,after appraisal or a new joinee,joining the organization at basic pay of above Rs.6500pm.

The PF contribution is not to be done in case of "Apprentice Trainee" as per the clause of "Apprentice Act,1961".

Hi ,
I own a recruitment firm, i have a small clarification, i'm planning to get into Contract Staffing so if i hire 15 employees in Contract on my payroll do i need to deduct PF ? and what all the components do i need to have in the Salary break up.

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